Merkel cell carcinoma (MCC) is an aggressive skin cancer that has quadrupled in incidence with a dismal five- year survival rate of less than 18% in advanced diseases. MCC disproportionately and predominantly affects Caucasian males older than 65 who are well represented in our Veteran population, especially for those who are deployed to high UV index tropical and subtropical zones and are not well protected due to other survival priorities. Hence, MCC has a growing impact on the VA healthcare system. Currently, there is no Food and Drug Administration (FDA)-approved targeted therapy for MCC. Recently, immunotherapies such as pembrolizumab and avelumab have been FDA-approved for advanced MCC; nevertheless, a significant portion of patients still succumb to their diseases. Thus, there is an urgent clinical need for novel therapeutic strategies for patients who fail out of or are unsuitable for immunotherapy. Aberrant amplification and mutations of PI3K pathway have been detected in up to 80% of MCCs, making it an attractive therapeutic target. This is supported by our clinical success in treating a Stage IV MCC patient with the 1st FDA approved PI3K-? inhibitor idelalisib, which elicited a complete clinical response. Furthermore, our preliminary studies demonstrate that copanlisib, the 2nd FDA approved PI3K inhibitor with activity predominantly against PI3K-?/? isoforms, exerts the most potent antitumor growth effects on MCC. Of relevance to this proposal, PI3K inhibition has been reported to enhance cancer immunotherapies. Thus, there is a strong rationale to develop new combinatorial immunotherapy with targeted therapies to boost therapeutic response and efficacy in MCC. Lack of syngeneic/genetically engineered animal models has hampered preclinical studies in MCC. Notably, in our preliminary studies we have successfully established a powerful, clinically relevant model system of MCC xenograft tumors in mice with competent human immune systems. We hypothesize that PI3K inhibition by copanlisib and PD-1 blockade by pembrolizumab will synergistically attenuate MCC tumor growth by inhibiting MCC cell proliferation and survival and enhancing tumor-infiltration of immune cells and their antitumor activities. Furthermore, we have optimized innovative single-cell RNA sequencing (scRNA-seq) methods to examine tumor heterogeneity and transcriptome profile in human MCC cells. Therefore, we are well positioned to pursue the following specific aims: (Aim 1) examine therapeutic efficacy and identify underlying mechanisms of copanlisib and pembrolizumab therapies on MCC xenograft tumor growth in humanized mice, and (Aim 2) identify cellular and molecular mechanisms of MCC tumor-immune interactions and antitumor immunity in response to copanlisib and pembrolizumab treatments. Using our novel MCC humanized mouse models, we will be able to examine, for the first time, tumor-immune response to copanlisib and pembrolizumab under competent human immune system. Importantly, tumor heterogeneity is a critical determinant of therapeutic failure and tumor progression. Recent advancements in scRNA-seq enable us to explore dynamics of tumor and immune cell subpopulations in response to treatments. To achieve our goals, we will utilize state-of-the-art biotechniques to comprehensively analyze the effects of copanlisib and pembrolizumab treatments on tumors and antitumor immunity at tissue, cellular, and molecular levels. We expect that successful completion of the proposed work will result in the following advances: (1) establishment of a novel treatment paradigm for combinatorial therapies in MCC, as well as other cancers that affect our Veterans and their family members such as melanoma and high-risk head and neck squamous cell carcinoma, (2) identification of tumor and immune cell subpopulations that mediate drug response, as well as biomarkers for sensitivity/resistance to copanlisib and/or pembrolizumab treatment, which can lead to future discovery of effective therapeutic strategies. Knowledge gained from the proposed studies will validate and accelerate clinical translation, which will help Veterans who suffer from MCC and cancers for which current immunotherapies are insufficient.